Question

The borough of Bellmawr had applied for a corporate Visa card and Visa issued the card to the Borough. The head clerk gave the card to an assistant clerk for the purpose of making purchases strictly related to the Borough's business. The assistant clerk made purchases that were unrelated to the Borough's business, such as buying herself lunch and dinner, as well as buying gift cards for family members and friends. The Borough told visa that they refused to pay the charges because they were not authorized. Visa insist that they are responsible for payment. What is the outcome and why?

Answer 1

When VISA approved for a business credit card, Borough agree to the terms and conditions that come along with using their account. VISA credit card issuers must had an agreement where they agree not to use their business card for personal expenses. As, Borough violate the terms of the card agreement, then VISA have the leverage to cancel their card.

As assistant clerk mixed personal and business finances as a result of which Borough is personally liable for any business debt if their business has legal trouble.

Borough is liable for the payment and has to make payment to VISA as per the agreement. If Borough disagrees to pay both their business and personal credit score will be affected along with the legal action.